U.S. crude oil prices retreat as unexpected stockpile build
author: Ann
2025-05-19
The international crude oil futures market fell significantly on Wednesday (May 14), under the dual pressure of the unexpected growth of US crude oil inventories and the rebound of the US dollar, erasing the gains driven by the adjustment of China-US tariff policies and market optimism. As of the close, the West Texas Intermediate (WTI) futures contract for June delivery on the New York Mercantile Exchange (NYMEX) fell by $0.52, or 0.82%, to $63.15 per barrel; the global benchmark July Brent crude oil futures fell by $0.54, or 0.81%, to $66.09 per barrel.
US crude oil inventories surged and the contradiction between supply and demand intensified
The latest data from the US Energy Information Administration (EIA) showed that as of the week of May 9, US crude oil inventories increased by 3.5 million barrels month-on-month to 441.8 million barrels, far exceeding analysts' expectations of a decrease of 1.1 million barrels. At the same time, the net import volume of US crude oil increased by 422,000 barrels per day, further exacerbating the pressure on the supply side. The day before, the American Petroleum Institute (API) reported an increase of 4.3 million barrels in inventory last week. The two-week inventory growth has triggered market concerns about oversupply.
Although gasoline inventories in the United States fell by 1.4 million barrels and distillate inventories fell by 3.7 million barrels during the same period, the decline in refined oil inventories failed to offset the negative impact of the surge in crude oil inventories. Analysts pointed out that although the OPEC+ alliance continued to increase production, it lowered its production growth forecast for the United States and other non-OPEC oil-producing countries this year on Wednesday (from 900,000 barrels/day to 800,000 barrels/day), suggesting that global supply growth may exceed the recovery rate of demand.
The rebound of the US dollar and profit-taking exacerbated the decline
The rebound of the US dollar index on Wednesday also dragged down oil prices. The strengthening of the US dollar has led to an increase in the cost of crude oil denominated in US dollars for holders of other currencies, suppressing international buying demand. On the same day, Goolsbee, president of the Federal Reserve's Chicago branch, said that although the inflation data in April was mild, it was not enough to reflect the potential impact of the adjustment of the US import tariff policy. The market's expectations for the Fed's monetary policy shift have cooled, further supporting the strengthening of the US dollar.
In addition, UBS analyst Stavnovo pointed out that after oil prices hit a two-week high, some long investors chose to take profits, exacerbating the pressure of market correction. Bob Yager, head of Mizuho Energy Futures, warned that OPEC+ continued to increase production without adjusting demand expectations, which may lead to an increase in the risk of oversupply in the future, thereby depressing oil prices.
Oil prices are still under pressure this year, and short-term fluctuations may continue
Although Brent crude oil futures have risen by 4.7% and WTI crude oil futures have risen by 8.49% so far this month, the two major benchmark oil prices have fallen by 11.45% and 11.95% respectively this year due to the imbalance between supply and demand and geopolitical factors since the beginning of the year. Compared with the same period last year, Brent crude oil closed down 20.13% on Wednesday and WTI crude oil fell 19.69%; compared with the high point of the year set on January 15, 2025 (Brent $82.03/barrel, WTI $80.04/barrel), the decline was more than 19%.
Market analysts believe that the short-term trend of oil prices will depend on changes in US inventory data, adjustments to OPEC+ production policies, and the path of the Federal Reserve's monetary policy. If US inventories continue to increase or the US dollar remains strong, oil prices may face further downward pressure.
US crude oil inventories surged and the contradiction between supply and demand intensified
The latest data from the US Energy Information Administration (EIA) showed that as of the week of May 9, US crude oil inventories increased by 3.5 million barrels month-on-month to 441.8 million barrels, far exceeding analysts' expectations of a decrease of 1.1 million barrels. At the same time, the net import volume of US crude oil increased by 422,000 barrels per day, further exacerbating the pressure on the supply side. The day before, the American Petroleum Institute (API) reported an increase of 4.3 million barrels in inventory last week. The two-week inventory growth has triggered market concerns about oversupply.
Although gasoline inventories in the United States fell by 1.4 million barrels and distillate inventories fell by 3.7 million barrels during the same period, the decline in refined oil inventories failed to offset the negative impact of the surge in crude oil inventories. Analysts pointed out that although the OPEC+ alliance continued to increase production, it lowered its production growth forecast for the United States and other non-OPEC oil-producing countries this year on Wednesday (from 900,000 barrels/day to 800,000 barrels/day), suggesting that global supply growth may exceed the recovery rate of demand.
The rebound of the US dollar and profit-taking exacerbated the decline
The rebound of the US dollar index on Wednesday also dragged down oil prices. The strengthening of the US dollar has led to an increase in the cost of crude oil denominated in US dollars for holders of other currencies, suppressing international buying demand. On the same day, Goolsbee, president of the Federal Reserve's Chicago branch, said that although the inflation data in April was mild, it was not enough to reflect the potential impact of the adjustment of the US import tariff policy. The market's expectations for the Fed's monetary policy shift have cooled, further supporting the strengthening of the US dollar.
In addition, UBS analyst Stavnovo pointed out that after oil prices hit a two-week high, some long investors chose to take profits, exacerbating the pressure of market correction. Bob Yager, head of Mizuho Energy Futures, warned that OPEC+ continued to increase production without adjusting demand expectations, which may lead to an increase in the risk of oversupply in the future, thereby depressing oil prices.
Oil prices are still under pressure this year, and short-term fluctuations may continue
Although Brent crude oil futures have risen by 4.7% and WTI crude oil futures have risen by 8.49% so far this month, the two major benchmark oil prices have fallen by 11.45% and 11.95% respectively this year due to the imbalance between supply and demand and geopolitical factors since the beginning of the year. Compared with the same period last year, Brent crude oil closed down 20.13% on Wednesday and WTI crude oil fell 19.69%; compared with the high point of the year set on January 15, 2025 (Brent $82.03/barrel, WTI $80.04/barrel), the decline was more than 19%.
Market analysts believe that the short-term trend of oil prices will depend on changes in US inventory data, adjustments to OPEC+ production policies, and the path of the Federal Reserve's monetary policy. If US inventories continue to increase or the US dollar remains strong, oil prices may face further downward pressure.
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